Xbox CEO Asha Sharma has directly refuted reports suggesting Microsoft might be considering selling its gaming division. In an interview with The New York Times, Sharma stated emphatically, "Xbox is not for sale." She further elaborated that the company will pursue all necessary avenues, including partnerships and operational models, to ensure its success.
The denial follows recent speculation fueled by reports from The Information, which indicated that Microsoft had explored spinning off Xbox as a subsidiary or even potentially selling it. This speculation arose amidst significant restructuring within Xbox, including thousands of layoffs, the closure or potential closure of several studios, and the cancellation of various game projects. Xbox's strategy now centers on fewer, larger franchises such as The Elder Scrolls, Fallout, and Minecraft, with franchises like Halo being integrated under Activision.
Sharma acknowledged the challenging financial landscape Xbox faces. In a blog post announcing layoffs in July, she cited operating margins significantly lower than comparable industry businesses. She highlighted that entering the current console generation with a smaller install base and a higher cost structure, coupled with slower-than-expected growth from Game Pass and multi-platform strategies, led to a weakening of the core business. The ongoing hardware crisis in the industry has further exacerbated these issues.
Analysts have expressed skepticism about the possibility of an outright sale, particularly given Microsoft's substantial investment in acquiring Activision Blizzard for $69 billion and the considerable expenses associated with Xbox's operations and hardware business. Some analysts suggest that Microsoft might instead divest individual parts of the Xbox business.
Despite these challenges, Sharma remains focused on expanding Xbox's reach. The company currently serves 500 million monthly players and has set an ambitious target of reaching one billion people daily. This goal is to be pursued through cloud computing initiatives in markets like Africa and South Asia, and by investing in Minecraft as a competitor to platforms like Roblox. Microsoft has also increased the price of Xbox consoles, citing a significant rise in component and memory costs, and anticipates further price pressures due to the industry's ongoing hardware crisis.